Releasing funds from a pension

stupendous_J

Just looking into (on behalf of my father) releasing funds from his pension. He's currently 57 & has a pension worth 28K. Obviously we're aware that he will no be able to claim this all back but any amount will help as he's looking to pay of a few debts & become debt free by the end of the year.

Where & how would we go about claiming this cash back? Any companies anyone could recommend?

Thanks in advance for your help.

Regards

J

dunstonh

Where & how would we go about claiming this cash back? Any companies anyone could recommend?

He cannot access the funds in the pension. It isnt what the pension is for.

The best he can get is take 25% of the value as a tax free lump sum and the rest can either be taken as an income or left invested until such time he wants the income to start.

He needs to be aware that doing this means you will end up with less pension income than if he took it at his normal retirement age and it will reduce his death benefits (which could impact on a spouse if there is one).

stupendous_J

Thanks for the quick response. As I mentioned, I knew we wouldnt be able to get a large ammount back, but 25% would definetly help pay of a large credit card!

Thankyou

EdInvestor

dunstonh wrote: »

The best he can get is take 25% of the value as a tax free lump sum and the rest can either be taken as an income or left invested until such time he wants the income to start.

The first route involves buying an annuity ( a taxable income for life).Check how much he would get here3: https://www.fsa.gov.uk/tables

The second option is called "income drawdown" and with a small fund, needs to be transferred to a SIPP.

Check here for more info on that: https://www.h-l.co.uk.

HL have an IFA division which can help you with the annuity if that's the way you want to go.

Retired_I.F.A.

The first route involves buying an annuity ( a taxable income for life).Check how much he would get here3: www.fsa.gov.uk/tables

It's a rough guide, not very accute as it's updated so infequently. (To quote Ed's employer H+L in a letter I recieved fom them yesterday "There have been 15 annuity rate rises in the last four weeks alone."

The second option is called "income drawdown" and with a small fund, needs to be transferred to a SIPP.

Or a personal pension, just because there are not many that offer it for small sums Ed decideds they should not exist.

Check here for more info on that: www.h-l.co.uk.

Or go see any IFA who can better or at least match H+L's terms.

how much commission you recieved from HL this month Ed, you sure refer enough punters to them?

HL have an IFA division which can help you with the annuity if that's the way you want to go.

Be careful with talking to H+L about annuities, when I looked at taking my benefits earlier this year having been out of the industry fo some years and unaware of drawdown as an option for me I contacted them and got quotes and was never told by them about drawdown as an option fo me. Funny thing is Ed told me

EdInvestor

Retired_I.F.A. wrote: »

Funny thing is Ed told me

Glad to be of service Retired IFA

HL are the cheapest SIPP if you want to invest in funds, hence they get mentioned a lot.I don't use them personally as I invest in shares and investment trusts.Sippdeal and Alliance Trust are the recommended suppliers in that area.

As for annuities, there are no discount brokers, more's the pity.

Retired_I.F.A.

HL are the cheapest SIPP if you want to invest in funds

They'd be a lot cheaper if they stopped mailing folks like me. I've had enough bumph off them to fill a couple of books in the last six months in about 10 mailings.

I'll have to ring Tom McPhail up their pensions head of research and my ex Widows life inspector one of these days and see if he will take me to lunch. It was a pie and a quick game of snooker in his Widows days, bet he'd foot the bill for a decent steak now.:D

dunstonh

HL are not the cheapest provider for funds. They may be amongst the cheapest SIPP for funds but other fund supermarkets and personal pensions can beat them very easily. Indeed, even your humble stakeholder can if you dont mind the lower choice of funds.

EdInvestor

As I said they are the cheapest SIPP provider for funds. PPs and stakeholders are not relevant when we are discussing income drawdown for small pensions.

The words Hargreaves Lansdown do I know tend to act like a red flag or blue touchpaper to many advisors, as the firm takes so much business from them.

Retired_I.F.A.

Nice of you to say Skandia probably the best insurance company for pensions in my view and the provider of my very small drawdown plan is irrelevant Ed cheers.

dunstonh

As I said they are the cheapest SIPP provider for funds

In the same way that a Boeing 747 is more fuel efficient than a car.

The words Hargreaves Lansdown do I know tend to act like a red flag or blue touchpaper to many advisors, as the firm takes so much business from them.

HL have very little or no impact on any adviser's earnings. They arent the biggest fund supermarket and their business went backwards last quarter whilst the biggest (which only deals with IFAs) increased. Their typical target market is the DIY investor.

Your constant promotion of HL as the solution for everyone is the problem. It doesnt matter what the person on the thread asks for you give HL as the answer even when we know HL are not the best option. When the IFAs then say that HL is not the best option you then turn to criticise the IFAs in an attempt to deflect from your inaccurate information.